JimBowie1958
Old Fogey
- Sep 25, 2011
- 63,590
- 16,767
The Federal Reserve is a brilliant central banking system, a sort of decentralized central bank, lol. Congresses outsourcing the monetary supply to professional banks who use their own debt notes to act as currency is simply an amazing creation, despite the many doubts many have and I too once had.
But there are some mighty storms coming that the Federal Reserve, working witht he POTUS and Congress, will have to navigate to see our nation safely into this century, and the first is a very basic problem.
1. Our nations elite are itself a moral hazard. They have lost their moral bearings and the more we try to save the existing system the worse we make things for them, ourselves and the nation. The gamesmanship of the elites to elude, deceive and manipulate the American people can only go on for so long. The new technologies are making it easier and easier annually to observe the deceptions and criminality that underlies most of our industries, banking system and legal system. The entire top industrial complexes of our nation are led by scam artists who are motivated solely to get rich and do not care what lies they must tell or destruction they leave in their wake.
The Housing Bubbles aftermath fixed not one single systemic problem. The banks are still pushing subprime mortgages and the big banks are still pooling them and selling off tranches, the revolving door between the Big Banks and government servants that supposedly oversee their activities still goes on. The Derivatives market is still unregulated and only larger, over $180 trillion total worth but it is so vast that no one really knows what it is worth. The blow up of this shadow banking system dearly destroyed the global economy and much of it is still weak, but nothing has significantly changed, only the deck chairs have been rearranged.
This must be addressed. The derivatives market must be regulated and tracked, subprimes must be closely watched and their highest interest rate capped by law.The Glass Steagal Act must be put back into law. Are these things too complex for our nations leaders to dig into and make common sense fixes to? No, but the corporations and banks that profit off these abuses are paying the politicians to look the other way.
2. When the US went off the Bretton Woods system and no longer allowed gold to be redeemed for USD, we instead began backing the US dollar with petroleum, in effect. The OPEC nations almost entirely take payment in USD only, creating huge demand for the USD across every market on the planet as every nation needs oil and trading in USD gets them those dollars fairly cheaply. If OPEC dumps the USD or technology changes introduce a better source of energy and the oil markets implode, the USD will be without effective asset backing as it currently enjoys with petroleum. We need to study ways of slipping in a new set of commodities to replace the oil that is now backing the USD as soon as possible before oil demand disappears.
3. New technology is bringing us to a jobless economy. Automation and robotics are going to be the new slaves of the 20th century and people will have to either engage in barter once again for goods and services or local communities will have to start using alternative currency schemes like time shares to keep the local economy moving despite the disappearance of nearly all jobs by 2050. A barter system of an economy dominated by alternative currencies will cause a serious shortfall to government revenues and a permanent depression for the US economy.
We must remove from the Federal Reserve the mandate to have full employment. The Fed must focus exclusively on keeping the value of the USD stable and reduce inflation.
If not, the Federal Reserve will not be able to replace reasonable adaptation to new technologies that bring with them new market realities.
But there are some mighty storms coming that the Federal Reserve, working witht he POTUS and Congress, will have to navigate to see our nation safely into this century, and the first is a very basic problem.
1. Our nations elite are itself a moral hazard. They have lost their moral bearings and the more we try to save the existing system the worse we make things for them, ourselves and the nation. The gamesmanship of the elites to elude, deceive and manipulate the American people can only go on for so long. The new technologies are making it easier and easier annually to observe the deceptions and criminality that underlies most of our industries, banking system and legal system. The entire top industrial complexes of our nation are led by scam artists who are motivated solely to get rich and do not care what lies they must tell or destruction they leave in their wake.
The Housing Bubbles aftermath fixed not one single systemic problem. The banks are still pushing subprime mortgages and the big banks are still pooling them and selling off tranches, the revolving door between the Big Banks and government servants that supposedly oversee their activities still goes on. The Derivatives market is still unregulated and only larger, over $180 trillion total worth but it is so vast that no one really knows what it is worth. The blow up of this shadow banking system dearly destroyed the global economy and much of it is still weak, but nothing has significantly changed, only the deck chairs have been rearranged.
This must be addressed. The derivatives market must be regulated and tracked, subprimes must be closely watched and their highest interest rate capped by law.The Glass Steagal Act must be put back into law. Are these things too complex for our nations leaders to dig into and make common sense fixes to? No, but the corporations and banks that profit off these abuses are paying the politicians to look the other way.
2. When the US went off the Bretton Woods system and no longer allowed gold to be redeemed for USD, we instead began backing the US dollar with petroleum, in effect. The OPEC nations almost entirely take payment in USD only, creating huge demand for the USD across every market on the planet as every nation needs oil and trading in USD gets them those dollars fairly cheaply. If OPEC dumps the USD or technology changes introduce a better source of energy and the oil markets implode, the USD will be without effective asset backing as it currently enjoys with petroleum. We need to study ways of slipping in a new set of commodities to replace the oil that is now backing the USD as soon as possible before oil demand disappears.
3. New technology is bringing us to a jobless economy. Automation and robotics are going to be the new slaves of the 20th century and people will have to either engage in barter once again for goods and services or local communities will have to start using alternative currency schemes like time shares to keep the local economy moving despite the disappearance of nearly all jobs by 2050. A barter system of an economy dominated by alternative currencies will cause a serious shortfall to government revenues and a permanent depression for the US economy.
We must remove from the Federal Reserve the mandate to have full employment. The Fed must focus exclusively on keeping the value of the USD stable and reduce inflation.
If not, the Federal Reserve will not be able to replace reasonable adaptation to new technologies that bring with them new market realities.
